Tag Archives: Reed Hastings

No Rules Rules by Reed Hastings

Summary

  1. Reed Hastings recounts Netflix’s origin story as well as some of the cultural aspects that have made them the dominant media company of the past decade

Key Takeaways

  1. If you want to build a culture of freedom and responsibility, the first step is to increase your talent density (hire great people, pay them top dollar, cull the mediocre), increase candor, and then remove unnecessary policies and rules (vacation, expense reports, dress codes, treat people as if they were responsible adults with good judgment…)
  2. Removing mediocre performers has a surprisingly large impact on the culture, output, and happiness of everyone who remains, boosting already high performers even higher
  3. Give feedback often start with employees giving the leader ship feedback get rid of jerks understand that you’re trying to leave people feeling optimistic and positive not be down because of your brutal honesty
  4. Netflix’s travel and expense policy can be summarized in five words: act in Netflix’s interest
  5. You are replacing rules and policies with leadership great people and common sense. For example the unlimited vacation policy must be followed up by the manager talking about what makes sense for the team so that you don’t hurt the company or your colleagues don’t take vacation in certain times we can only have one person out from our team at any given time etc.
  6. For freedom and responsibility to really work there has to be repercussions that are known. For example at Netflix if you’re caught abusing the travel and expense policy you’re immediately fired no one strike you’re just out
  7. Speed in every facet of decision making has tremendous second order effects
  8. Big salaries, not big bonuses, are beat for innovation since people’s minds aren’t preoccupied with their target KPI or whatever metric their bonus is reliant upon. Bonuses and incentives are great for more mechanical and routine work but not so great for the creative. Pay top of salary estimates
  9. Shining sunlight on mistakes, especially made by leaders, builds trust, encouraged others to take risks, and enhances velocity. if you have proven you’re confident and effective admitting your mistakes builds trust and likability whereas ineffective people shining a light on their mistakes only further a Rhodes peoples trust him
  10. Don’t seek to please your boss but seek to do what is best for the company
  11. Only a CEO who is not busy can truly do their job. You need to decentralize decision making as much as possible which enhances peoples accountability and excitement at work and allows the CEO freedom to think and beat the company
  12. Adequate performance receives a generous severance package
  13. The keeper test is important to build talent density. If someone on your team just told you they were leaving for another company would you fight for them? If not probably best to give them a generous severance package
  14. Only say things about people that you’d be comfortable saying to their face
  15. Lead with context, not control
  16. Netflix’s north star is to be a company that is adaptable and flexible. They almost always pay more if that means getting additional flexibility
  17. Pyramid and the tree – most organizations are structured like a pyramid but if innovation and creativity are your competitive advantage the structure like a tree is more effective. The boss is like the roots that helps keep the organization grounded and he is at the bottom setting the context rather than at the time controlling everything

What I got out of it

  1. Freedom + Responsibility + Talent Density; candor, trust, shining spotlight on mistakes, do what’s best for the company and not for your boss, adaptability/flexibility > plans

That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea by Marc Randolph

Summary

  1. Marc describes the formation and foundation of Netflix, his role, and the evolution of Netflix from DVD store/rental to dominant international media company. “Goal is to puncture myths but also reveal what they did and why it worked, turning Netflix from an unlikely idea into the media behemoth it is today – not let’s or principles but hard won truths (like distrust epiphanies)”

Key Takeaways

  1. The daily car rides with Reed and Marc seem enviable – what an amazing gift to be able to share ideas and have them destroyed without it impacting the relationship 
  2. From the beginning, Reed was intent on focusing on a business with recurring revenues that scaled massively 
  3. In one of the brainstorms with Reid, Marc brought up a VHS delivery service. After doing research it became clear that the tapes and shipping was too expensive, but once DVD’s came out, the whole equation changed and the business model now seemed viable 
  4. One of Marc’s guiding philosophies is to have his team loosely coupled but highly aligned – show the team where you want to go but not how to get there. Treat people like adults, trust them, give them a vision to go all in on
  5. It was expensive to acquire all the dvds at the beginning, trying to claim they have every dvd ever made, but they reframed it so that this expense was really cheap advertising. A dvd costs $20 but the reputation for having every dvd is priceless 
  6. Instituted a Tuesday date night with his wife where he would leave work at 5pm no matter what to spend time with her and no kids 
  7. Learned many of his leadership lessons from his time outdoors and exploring nature 
  8. Focus and doing your core competency extremely well is a matter of life and death for a startup 
  9. Environment of freedom and responsibility coupled with radical honesty is the foundation of Netflix’s culture
  10. They were struggling getting people to rent DVDs although being at success selling online. Eventually they tested out the idea of a subscription service with no late fees and an automatic sending of the next DVD in your queue when you return the old one. Mark would never have thought this was the path Netflix would have taken but it was immediately successful, so they ran with it 
  11. Nobody knows anything. This isn’t an indictment, ira a reminder. If this is true, you have to trust yourself, try things, and be ok with failing
  12. Randolph’s rules for success 
    1. Do at least 10% more than you’re asked to
    2. Never state as fact something which you don’t know 
    3. Be curteous always, up and down 
    4. Never complain 
    5. Don’t be afraid to make decisions when you have the facts 
    6. Be open minded but skeptical 
    7. Quantify whenever possible 
    8. Be prompt 
  13. You have to love the problem rather than the solution. This will keep you engaged and motivated even in difficult times 

What I got out of it

  1. Nobody knows anything so you won’t know whether an idea is good or bad until you try it. Marc’s enthusiasm is palpable even through the pages and the car ride him and Reed shared for years where they discussed and batted down ideas with radical honesty seems like an incredible gift